An amortization schedule — לוח סילוקין ( luach silukin) — is the table showing, month by month, where your money actually goes: how much reduces the debt, how much is interest, and what is left.
It is the document people skim and then regret skimming. It explains why the balance barely moves in the early years, and what the loan really costs by the end.
Israel has one wrinkle most English-speaking borrowers won't have met: you choose not just a rate, but a repayment method. The two common ones behave very differently.
What the schedule contains
One row per payment, four numbers in each:
Payment — what leaves your account
Interest — the part that is the cost of borrowing
Principal — the part that actually reduces the debt
Balance — what remains afterwards
Interest is charged on the remaining balance, not the original amount. That single fact explains almost everything else.
The two methods
Spitzer (שפיצר, named after the mathematician Simon Spitzer) is the annuity method familiar from most countries: a constant monthly payment. To hold the payment flat, the internal split shifts — mostly interest at the start, mostly principal at the end.
Equal principal (קרן שווה, keren shava) does the opposite: you repay the same amount of principal every month and add interest on the balance. The payment starts high and falls every month.
Spitzer is the default in most Israeli mortgages. Equal principal is available and less common.
The difference, in numbers
A loan of ₪600,000 over 20 years at 5%. The rate is illustrative only — not a market quote, not a forecast.
| Spitzer | Equal principal | |
|---|---|---|
| First payment | ₪3,960 | ₪5,000 |
| Final payment | ₪3,960 | ₪2,510 |
| Total interest | ₪350,336 | ₪301,250 |
| Total repaid | ₪950,336 | ₪901,250 |
Equal principal saves ₪49,086 in interest — about 14% less. The price is a first payment ₪1,040 higher, roughly 26% more.
The reason is simple: you repay principal faster, and interest is charged on what's left. But the bank assesses your affordability against the highest payment, so equal principal requires a higher qualifying income for the same loan.
The two payments cross over at month 101 — about eight and a half years in. Before that you pay more each month; after it, less.
Why the balance barely moves at first
This is the part that surprises people. The same loan on Spitzer, at four points in time:
| Month | Payment | Interest | Principal | Balance |
|---|---|---|---|---|
| 1 | ₪3,960 | ₪2,500 (63%) | ₪1,460 | ₪598,540 |
| 60 | ₪3,960 | ₪2,094 | ₪1,866 | ₪500,729 |
| 120 | ₪3,960 | ₪1,566 (40%) | ₪2,394 | ₪373,329 |
| 240 | ₪3,960 | ₪16 | ₪3,943 | ₪0 |
In the first payment, 63% of the money is interest. Only ₪1,460 of ₪3,960 reduces the debt.
And the figure worth knowing before you sign: half the principal is not repaid until month 149 of 240 — about 12 and a half years into a 20-year loan. If you sell after ten years, you will owe more than you expected.
So what does the loan actually cost?
In the example: ₪350,336 of interest on ₪600,000 borrowed — roughly 58% on top of the amount you received.
Three things move that number, in order of force:
The term. The strongest lever by far. Extending reduces the monthly payment and increases total interest, sometimes dramatically.
The rate. Obvious, but half a percentage point compounds into tens of thousands of shekels over decades.
The repayment method. The smallest of the three, but not trivial — ₪49,086 here.
Two other structures you'll hear about
Balloon (בלון) — principal, in whole or part, deferred to the end of the term. Low monthly payment, a large payment waiting, and interest accruing on a balance that hasn't come down.
Grace (גרייס) — an initial period paying interest only, or nothing at all. Common when buying from a developer. Same principle: the principal doesn't fall during that time, and interest keeps running.
Both lower the payment now and raise the cost later. Neither is wrong — they just need to be a deliberate choice rather than a surprise.
How to read your own schedule
When the bank hands you one, three rows are worth your attention:
The first row — how much of payment one is interest
The last row — total interest across the whole term
The row for the month you might sell or refinance — the balance there is what you'd actually owe
A split mortgage has a separate schedule per component, and they need not use the same method or term. If you're not yet sure how components combine into one loan, the mortgage mix guide covers the full picture.
To see a complete schedule before you sign, LoanWise shows the month-by-month principal and interest split for each component.
What this schedule excludes
Principal and interest only — no taxes, insurance, fees or closing costs.
On a CPI-linked track the schedule shifts in practice, because the principal is revalued with the index. On a variable track it is built from today's known rate and is rebuilt at each reset. A schedule is a snapshot, not a promise.
LoanWise is a calculator. Not a bank, not a broker, not financial advice.
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Start Your CalculationFAQ
What is an amortization schedule?
A table listing every payment in the loan, showing how much goes to principal, how much to interest, and the remaining balance.
What's the difference between Spitzer and equal principal?
Spitzer holds the monthly payment constant and varies the internal split. Equal principal holds the principal repayment constant, so the payment declines over time. Equal principal costs less in total interest but demands more in the early years.
Why doesn't my balance drop in the first years?
Because interest is charged on the outstanding balance, which starts high. In the example above, 63% of the first payment is interest.
Which is better?
It depends on your cash flow. Equal principal costs less overall but requires higher early payments, and the bank will assess your affordability against the highest one.
Can I switch methods later?
Not directly — it would mean refinancing, which carries its own costs, including possible early-repayment fees on fixed-rate components.
